The Thai baht’s strongest surge in 26 years presents risks to Thailand’s tourism industry, reducing foreign tourists’ spending power and potentially impacting tourism growth targets.
The baht’s biggest surge since 1998 is putting Thailand’s tourism recovery at risk, as the currency’s sharp rise impacts both foreign spending and the country’s economic stability. As the baht strengthens to levels unseen in over two decades, it raises concerns within Thailand’s key sectors, particularly tourism. This 26-year high, linked partly to the weakening US dollar, has disrupted the competitive edge of Thailand’s tourism industry, which is a cornerstone of the nation’s economy.
The unexpected rise of the baht, appreciating by over 9% against the US dollar in the past three months alone, has prompted government officials to urge the Bank of Thailand (BoT) to take swift action. Commerce Minister Pichai Naripthaphan and Deputy Finance Minister Paophum Rojanasakul have called for measures to stabilize the exchange rate, with Paophum emphasizing the need for the baht to remain stable—neither too strong nor too weak.
Despite Thailand’s efforts to attract and maintain foreign tourists, the baht’s surge could diminish their spending power. Surawat Akaraworamat, vice president of the Tourism Council of Thailand, noted that higher exchange rates make Thai goods and services appear more expensive to international visitors. This may result in reduced spending on accommodation, shopping, and entertainment, all critical contributors to tourism revenue.
Thailand’s tourism sector, which has shown resilience with nearly 25 million arrivals in 2024—a 31% increase from the previous year—could see these numbers decline if the baht remains strong. Prime Minister Paetongtarn Shinawatra, who has made economic growth and cost reduction key priorities of his administration, faces the challenge of ensuring that tourism, one of Thailand’s few economic bright spots, remains robust in the face of currency volatility.
The baht’s appreciation also poses risks to Thailand’s ability to meet its tourism revenue targets for the year. The Tourism Authority of Thailand (TAT) set ambitious goals of hosting 36.7 million tourists and generating 2 trillion baht in revenue in 2024. However, with the baht’s strength making the country more expensive for foreign tourists, these targets may prove harder to achieve.
Nattaporn Triratanasirikul, deputy managing director of the Kasikorn Research Center, highlighted the baht’s strength as a key issue to be addressed in the BoT’s upcoming Monetary Policy Committee meeting. Economists speculate that the central bank may need to intervene with monetary easing to stabilize the baht and mitigate its impact on tourism and exports.
While the strong baht has not yet significantly affected the number of foreign visitors, experts warn of its “psychological impact” on tourist spending patterns. The perception of Thailand as a more expensive destination could reduce tourist arrivals in the future, particularly from budget-conscious travelers. Suksit Suvunditkul, president of the southern chapter of the Thai Hotels Association, emphasized that prolonged currency strength could lead to a downturn in foreign visitor numbers.
For tourism professionals, this poses a significant challenge. The rise in the baht could shift the focus toward premium markets less affected by currency fluctuations, or demand a rethinking of pricing strategies to maintain competitiveness in the global tourism landscape.
In conclusion, the baht’s biggest surge since 1998 is more than just a currency issue; it represents a significant hurdle for Thailand’s tourism sector. To protect one of the country’s most vital economic drivers, the government and financial institutions must work to stabilize the currency while ensuring Thailand remains an attractive destination for foreign tourists.
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